Choose the repayment term of payday loans online: a double-edged sword

Thanks to the technological boom that we have experienced during the last decades, it is now possible to carry out a large number of operations through the Internet. For some time, it is possible to apply for personal loans online both to banks and private companies and many lenders even allow the client to choose in how many installments and how long he wants to repay the borrowed money plus interest. However, choosing a return period that is too long may end up being very expensive.

Why we should choose a short-term to return a personal credit online

When comparing different personal loans online we usually look at aspects such as interest or commissions to discover which are the cheapest. However, one of the factors that make the loans more expensive is the return period, since the longer we take to return a loan, the more we will pay in interest. Let’s see an example: if we reimburse an online personal loan of € 10,000 to 10% APR in 3 years, we will have to return a total of € 11,616.12 to the lender. On the other hand, if we refund it in 5 years, we will pay a total of € 12,748.2. As we see, choosing a term of 3 years and not 5 years will allow us to save € 1,132.08 in interest.

Other aspects to consider when requesting personal loans online

As we have seen, the reimbursement period greatly influences the final price of personal online loans. To get the financing we need at the lowest possible cost, we must choose a short return period and, in addition, hire a personal loan online with a low-interest rate, with no fees and no additional costs of any kind.

The interest rate and commissions of personal credit online

To calculate the monthly payments of personal loans online we must look at both the interest rate and the commissions. The interest is the percentage on the capital to be owed that we will have to pay to the entity, while the commissions are the compensations that some lenders charge for their services. The payday loans online via Citrus North Online Lender has the most competitive interest rates in the market and do not include any type of commission.

Remember that to calculate how much a loan will cost us we must take into account the APR and not the TIN since it includes both the interest on the loan and the commissions.

Linkages and other costs

Personal online loans can also include other hidden costs in the fine print: we refer to linked products and payment to third parties. Some banks will demand that we contract their products to be able to access their credits, but the cost of these linked products is not included in the APR. The most usual is that they ask us to pay for income (payroll, pension …) and to contract insurance or credit and debit cards. In addition, depending on the amount that we request, some banks will force us to sign the contract before a notary and will include the fees of this professional in the final price of the personal loan.